On May 31, 2017, the Federal Reserve Board released final amendments to the check collection and return provisions in Regulation CC (Subparts A, C and D) to reflect that the check payment system is virtually all electronic. These provisions were updated to, among other things:
- Define the terms “Electronic Check” and “Electronic Returned Check”
- Establish Electronic Check and Electronic Returned Check warranties
- Apply indorsement standards to Electronic Checks and Electronic Returned Checks
- Refine the existing expeditious return requirement, and acknowledge all returns are local for those rules
- Define “Electronically Created Item” (ECI) and establish a new ECI indemnity to provide some level of protection to banks that receive them
- Create a new “Remote Deposit Capture” (RDC) indemnity to provide some level of protection to the depositary bank that accepts the original paper check for deposit and experiences a loss due to duplicate payment
Federal Reserve Board Information
ECCHO Rules Information from The Clearing House
The ECCHO Rules conform with all major amendments to Regulation CC
ECCHO Rules available at www.eccho.org
ECI Indemnity Claims under ECCHO Rules
There will not be an automated adjustment type for processing ECI Indemnity claims under the ECCHO Rules. The ECCHO Membership made this decision in order to monitor the environment and learn from the initial ECI Indemnity claims that are filed.
RDC Indemnity Claims under ECCHO Rules
Sample Item Identification form
Other Resources from The Clearing House
Operating Circular 3 (OC3) Information from the Federal Reserve Retail Payments Office (RPO)
Though the amendments to the Regulation CC changes are effective July 1, 2018, the option to submit these indemnities through the Federal Reserve Banks will be effective on a later date that will be announced once changes to Regulation J are finalized. General requirements and information for submission of the two new investigation types, Unauthorized Remotely Created Item (UECI) and Remote Deposit Capture Item (RDC), will be reflected in the online Check Adjustments Quick Reference Guide.
See https://www.frbservices.org/news/communications/052218-new-check-options.html for more information on the upcoming OC3 adjustment changes.
ECI Indemnity Claims under OC3
There are three new indemnities for the Electronically Created Item (ECI). A bank that transfers or presents an ECI indemnifies each subsequent bank in the collection and return chain against any loss that results because (i) the item was not derived from a paper check, (ii) the item has already been paid or (iii) the item was not authorized by the account holder. The Warranty / Indemnity Claim (WIC)1 and the Paid Item (PAID)2 investigation type descriptions will be expanded to include the new ECI indemnities and will allow customers to submit claims for those indemnities. A new option for the WIC will also be available to allow banks to submit adjustments for unauthorized ECIs3.
https://www.frbservices.org/resources/financial-services/check/reference-guide/forward-return-types/ueci.html - information on the Warranty/Indemnity Claim (WIC) Associated with Unauthorized Electronically Created Items (UECIs)
RDC Indemnity Claims under OC3
There is also a new Remote Deposit Capture (RDC) indemnity that will allow a depositary bank that accepts the deposit of the original paper check to recover losses, due to the check having already been paid, directly from a bank that previously permitted its customer to deposit the check through remote deposit capture. A new option for the WIC will be available to allow banks to submit adjustments to recover the loss of the check.
https://www.frbservices.org/resources/financial-services/check/reference-guide/forward-return-types/rdc.html - information on the Warranty/Indemnity Claim (WIC) Associated with Remote Deposit Capture (RDC) Items
Entry in Error
https://www.frbservices.org/resources/financial-services/check/reference-guide/forward-return-types/err.html - information on an entry from the Federal Reserve that you believe to be in error.